Catering company energy suppliers, tariffs and costs

Catering businesses in the UK face unique energy challenges due to their reliance on both electricity and gas for various operations. From powering commercial kitchen appliances to maintaining optimal storage conditions, energy costs can significantly impact a catering company's bottom line. Efficient energy management is essential in this highly competitive industry, where profit margins can be tight. As such, it becomes crucial for catering businesses to understand their energy usage patterns and explore favourable tariffs that align with their operational needs. By doing so, they can ensure that they are not only compliant with environmental standards but also running their operations cost-effectively.

How much does energy cost for a catering company?

There is no published price list for catering companies. What a catering company pays depends on how much it uses in a year, when it agreed its contract and for how long, wholesale prices at that time, the standing charge, meter type, payment method and credit history. The most recent government figures, for the second quarter of 2026 (April to June, provisional), put the average price paid by UK non-domestic customers at 24.51p per kWh for electricity and 5.28p per kWh for gas, including the Climate Change Levy and standing charges and excluding VAT. A year earlier the averages were 24.03p and 5.31p. Smaller users typically pay more per unit: businesses using under 20,000 kWh of electricity a year averaged 38.36p per kWh, and those using under 278,000 kWh of gas averaged 9.31p per kWh.

Source: Department for Energy Security and Net Zero, Prices of fuels purchased by non-domestic consumers in the UK (Quarterly Energy Prices tables 3.4.1 and 3.4.2), published 29 September 2026. Q2 2026 figures are provisional; next update 17 December 2026. Prices are fully delivered averages including the Climate Change Levy and all other elements except VAT, so standing charges are already spread across the units. Averages across every UK business in a band, not quotes, and not comparable with a supplier’s unit rate.

Working out a monthly figure for your business

Take the annual kWh from your latest bill or annual statement, find the band above and multiply for a rough benchmark. A site using 15,000 kWh of electricity a year sits in the very small band: 15,000 × 38.36p is about £5,750 a year, or roughly £480 a month before VAT. A site using 60,000 kWh of gas a year: 60,000 × 9.31p is about £5,590 a year, or roughly £465 a month. The bands are statistical groupings used by the government, not supplier price breaks, so treat them as a guide to what similar-sized sites paid rather than a price you will be offered. To judge an actual quote, compare its total annual cost (unit rate × your annual kWh, plus the daily standing charge × 365) with what you pay now.

VAT and the Climate Change Levy on business energy

The prices above exclude VAT. Business energy normally carries VAT at 20% plus the Climate Change Levy (CCL). HMRC applies the 5% reduced rate, with no CCL, in three cases. First, low usage: supplies averaging no more than 33 kWh of electricity a day (1,000 kWh a month) or 145 kWh of gas a day (4,397 kWh a month) are treated as domestic use whoever the customer is. Second, fuel and power for domestic use, which HMRC defines to include homes providing care for the elderly or disabled, children’s homes, hospices and school or university residential accommodation. Third, a charity’s non-business activities. From 1 October 2026 to 31 March 2027, electricity that qualifies for the reduced rate is charged at 0% VAT instead of 5% in England, Scotland and Wales; qualifying gas stays at 5%, qualifying electricity in Northern Ireland stays at 5%, and electricity returns to 5% from 1 April 2027. HMRC has not changed which supplies qualify or the certificate process; the same rules decide whether a supply gets 0% or 20%. Where a site is mixed, 60% or more qualifying use means the whole supply gets the reduced rate; below that the supply is split between the two rates, and the customer gives the supplier a certificate declaring the qualifying percentage. Source: HMRC VAT Notice 701/19 (sections 2.8, 3.2 to 3.5, 4.2 and 5.2, updated 5 February 2025), gov.uk VAT rates and HMRC Revenue and Customs Brief 10 (2026).

Do Ofgem’s microbusiness protections apply to catering companies?

Ofgem treats a business as a microbusiness if it has fewer than 10 employees (or their full-time equivalent) and an annual turnover or balance sheet total of no more than £2 million, or if it uses no more than 100,000 kWh of electricity or 293,000 kWh of gas a year. A business can be a microbusiness for one fuel and not the other. Independent catering companies that meet either test are covered by Ofgem’s microbusiness rules, which give extra protections around contract terms and renewals (Ofgem: get energy for your business).

Do business energy rates vary by region?

Yes. Part of every unit rate covers the cost of the local electricity distribution network, and Great Britain has 14 licensed distribution areas each with its own charges, so identical contracts are priced differently in, for example, the north of Scotland and London. DESNZ does not publish non-domestic prices by region, so regional figures quoted elsewhere are supplier or broker estimates rather than official statistics.

Which energy supplier is best for catering companies?

There is no single answer. Suppliers price business contracts individually rather than publishing standard tariffs for catering companies, so the cheapest supplier for one business is often not the cheapest for the next: each prices on the consumption, meter type, contract length and credit profile in front of it. Compare the total annual cost of like-for-like contract lengths rather than the headline unit rate, and check the standing charge and what happens when the contract ends before signing.

How catering companies use energy

Catering companies typically experience high energy usage due to the nature of their operations, which often include cooking, refrigeration, and cleaning. Energy consumption can vary significantly throughout the day, with peaks during preparation and service times. Electricity powers essential kitchen equipment like ovens, mixers, and refrigerators, while gas is commonly used for cooking and heating water. Understanding the peak usage times can help catering businesses optimise their energy use and manage costs effectively.

What affects energy bills for catering companies

Several factors can affect energy costs for catering companies, including:

• Type and efficiency of kitchen equipment used.
• Operational hours and intensity of energy use during peak times.
• Seasonal variations affecting heating and cooling needs.
• Energy tariffs and supplier rates.
• Building insulation and energy efficiency measures.

How to compare tariffs

When comparing energy tariffs, catering businesses should consider the following checklist:

• Review current energy consumption patterns and identify peak usage periods.
• Investigate fixed vs variable tariff options.
• Consider dual fuel options if using both gas and electricity.
• Check for any hidden fees or contract lengths.
• Evaluate the potential benefits of green energy tariffs.

Gas or electricity: what matters most

For catering companies, both gas and electricity are crucial, but their importance can vary based on the specific operations. Gas is often preferred for cooking due to its quick and efficient heating capabilities, whereas electricity is essential for refrigeration and lighting. Balancing the use of gas and electricity can help manage costs and improve energy efficiency.

How switching works

The process of switching energy suppliers for a catering company involves several key steps:

1. Review your current energy contract and note the end date.
2. Gather recent energy bills to understand your consumption.
3. Research and compare available energy tariffs.
4. Contact the chosen supplier and initiate the switch.
5. Ensure no disruption in your energy supply during the transition.

More business energy guides

Return to our business energy hub to explore guides for other industries, or go directly to our business gas or business electricity pages.

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